Leveraging German R&D Tax Credit Program

Research & Development Tax Credits are available to pharma and biotechs to incentivize drug development and clinical research in countries around the world

In this article, we will discuss the newly launched German R&D tax credit program, which is part of local government strategy to boost innovation in drug development and support R&D activities in the private sector. First, a bit of information about Precision for Medicine (PFM). We are more than just a Contract Research Organization and have a comprehensive suite of capabilities to support the spectrum of biopharmaceutical companies’ needs across the drug development lifecycle. We are excited to share later on in this article what services we can provide locally in Germany, which will help Sponsors (Biotech and Pharma) take advantage of the German R&D tax credit program. 

Disclaimer: PFM prepared this article for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please consult your own tax, legal, and accounting advisors before engaging in any DE tax credit applications.

Insights into the DE R&D Tax Credit Program

Now, let’s dive back into the information we have to share. DE Biopharma companies are considered a critical hub of innovative drug development and the recent German Act on Tax Incentives for Research and Development, also referred as to the Forschungszulagengesetz (FZulG), aims to establish, and strengthen Germany as a preferred location for innovation as well as technology hot spot. Importantly, R&D expenses can be claimed on activities performed throughout the drug development process hence the FZulg may result in material tax savings for both German small and medium-sized enterprises/start-up businesses and international corporate groups. 

Importantly, guidance on how the process works and claimant assistance to accurately select eligible activities and their associated costs exists on the German ministry of Finance website (here). Particularly, a two-step process for application and award of the R&D allowance is necessary:

• Application for R&D project certification with the R&D grants certification Office, also known as the Bescheinigungsstelle Forschungszulage (BSFZ)
• Application to the tax office for determination of the tax allowance

If your R&D entity is paying taxes in Germany and you want to initiate an R&D tax credit application, we encourage you to learn more about this here on their website.

DE Based Services available from Precision for Medicine

Providing customized CRO solutions from late pre-clinical stage all the way through post-launch clinical trials, Precision for Medicine offers a unique partnership to promote innovation in Germany, prioritizing R&D activity development locally and maintaining close collaboration with DE R&D centers of excellence. Below is a list of available services based out of the DE.  

Collaborate with a DE-based Partner

For innovative BioPharma companies where you want to tap into DE R&D tax credits, it’s also critical to work with a partner with services and staff in DE. This is where PFM can support your drug development innovation.